The Gag Order Everybody Blamed on OpenAI Was Already Illegal

TL;DR: In May 2024 the internet found out OpenAI made departing staff sign lifetime non-disparagement agreements or risk their vested equity. Everyone treated it as a new outrage from a new kind of company. The National Labor Relations Board had banned that exact practice fifteen months earlier, nationwide and retroactively, in a case brought on behalf of eleven furloughed service workers at a hospital in Mount Clemens, Michigan. Nobody knows their names.

In June 2020, eleven service workers at McLaren Macomb hospital in Mount Clemens, Michigan were permanently furloughed. On the way out they were handed severance agreements.

The agreements said they couldn’t say anything that might disparage or harm the image of the hospital. They also said they couldn’t tell anyone what was in the agreement. Not a reporter, not a coworker, not the union.

Ordinary paperwork. Every lawyer in the country had a version of it in a folder.

On February 21, 2023 the National Labor Relations Board decided McLaren Macomb, 372 NLRB No. 58, and that paperwork stopped being ordinary. Broad confidentiality and non-disparagement clauses in a severance agreement violate Section 7 of the National Labor Relations Act. And the Board went further than anyone expected on one specific point: the employer doesn’t have to enforce the clause to break the law. Offering it is the violation.

Handing you the page is the illegal act.

The Board’s General Counsel then put out guidance saying it applies retroactively. Agreements already signed, already filed, long forgotten. Hold on to that detail, because that guidance is the thing that goes missing at the end of this.

Fifteen months later

On May 22, 2024, Vox published the OpenAI exit documents. Departing employees had been given roughly a week to sign something that barred them from criticizing the company for the rest of their lives, and acknowledging that the agreement existed was itself a breach of it. Their vested equity was the thing on the table.

The reaction was enormous and it was all pitched forward. A new kind of company, a new kind of power, a new problem nobody had rules for yet.

There were rules. There’d been rules for fifteen months.

Sam Altman said vested equity is vested equity, full stop, and the company released former employees from the obligations within days. Good. That’s the right outcome and I’m not going to pretend otherwise.

But watch how it happened. It happened because a journalist got the documents and the internet got loud. Not because anybody got made to follow a rule that existed and covered it.

The part that makes it worth writing down

Here’s where I have to be straight with you, because the fun version of this argument isn’t quite true.

Section 7 covers employees. It doesn’t cover supervisors, managers, independent contractors or agricultural workers. A senior researcher at a frontier lab may well sit outside it. So “OpenAI broke the law in 2023 and nobody noticed” isn’t a sentence I can write, and I’d rather tell you that than have a labor lawyer tell you in the comments.

What I can write is stranger, and I think better.

The protection is real, it is national, and it reaches furthest for the people with the least room to argue. Not the researcher who’s got a lawyer, equity, and a name the press already knows. The service worker. The one who gets handed a page on the way out and signs it because the alternative is nothing.

Eleven of them, at a hospital in Michigan, in a month when the country had other things on its mind. They didn’t go viral. There was no thread. They’re nobody, as far as the public record goes, and they moved the law for everybody.

And then it got quieter

In March 2025 the Acting General Counsel rescinded Memorandum GC 23-05 as part of a bulk rescission of more than thirty memoranda. That is the guidance I told you to hold on to. The one that spelled out retroactivity, and what a compliant severance agreement now had to look like.

The decision itself still stands. The Board hasn’t overturned it. What went was the instruction sheet, and with it a lot of the certainty that made employers actually change their templates.

So the rule is intact and quietly less enforced than it was. That’s the normal condition of most protections you’ve got. Not repealed. Just nobody explaining them to anyone any more, with any urgency.

What I take from it

Everybody who was angry in May 2024 was angry at the right thing. I was too.

We were just angry two years late, at a company, about a practice that a labor board had outlawed on behalf of people whose names never made it into a single story about it, including this one, because I could not find them either.

The rule that protects you was almost certainly won by somebody you have never heard of, in a case you never read about, for reasons that had nothing to do with you. That’s not a comforting thought and it isn’t meant to be. It’s an argument for knowing what you’re owed before the next outrage lands and everybody agrees there ought to be a law.

There usually is.

Sources: NLRB summary of decisions, week of February 21, 2023 · Holland & Knight on retroactivity · Mintz on the 2025 rescission of GC 23-05

The OpenAI exit documents were reported by Kelsey Piper at Vox on May 22, 2024, and the company released former employees from the obligations that week. Those outlets block automated fetching, so I have not linked them: the rule here is that a link I could not open myself does not go in front of you.